Jason C. H. Chen, Ph.D.
Professor of MIS
School of Business Administration
Gonzaga University
Spokane, WA 99258 chen@jepson.gonzaga.edu
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• We are all familiar with the rapid pace of change we are seeing now in large part due to the emergence of the e-business economy and Internet time. Business life cycles are getting shorter and shorter and we are all struggling to adapt our organizations and business process to cope with that change.
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• Business Environment External
• Enterprises Environment Internal
• IT Environment
Internal &
Technology
Business
Success
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TM -3
• “The important point is that technology neither encourages nor discourages centralized or decentralized structures and controls, but … offers new possibilities.”
N
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Information System Strategy Triangle
Business (Firm)
Strategy
Where is the business going and why?
Needs and priorities
Organizational Strategy IS/IT Strategy
What is required?
Infrastructure and services
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
How it can be delivered?
1. Architecture/Infrastructure,
2. MIS Organization (sourcing and
IT governance)
3. Funding
4. Project Management 5
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• Centralized : reduces duplication since resources under one control and, often, in one location.
•
• Decentralized : creates flexibility because resources not in the same location or control
“Federalism” combines centralization with decentralization (Figure 8.3 shows the continuum of where these structures fall.)
• For example:
– Bethlehem Steel allows major business units (plants) to decentralize and operate independently
– Levi-Strauss centralized to minimize the duplication of resources and save on costs.
What organizational structure does Verifone use?
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Figure 8.3 Organizational continuum
Decentralization Federalism Centralization
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1. 1960s - mainframes dictated a centralized approach.
2. 1970s - remained centralized due in part to the constraints of mainframe computing
3. 1980s - advent of the PC and decentralization
4. 1990s - the Web , with its ubiquitous presence and fast network speeds, shifted some businesses back to a more centralized approach
5. 2000+ - the increasingly global nature of many businesses makes complete centralization impossible
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Eras of information usage in organization (Extra)
Era I 1960s Era II 1970s
Primary Role of IT
Efficiency
Automate existing paperbased processes
Justify IT
Expenditures
ROI
Target of
Systems
Organization
Effectiveness
Solve problems and create opportunities
Increasing productivity and decision quality
Organization/
Group
Era III 1990’s
Strategic
Increase individual and group effectiveness
Competitive position
Individual manager/group
Era IV 1990s
Strategic
Transformation industry/ organization
Competitive position
Business processes
Information
Models
Dominant
Technology
Application specific
Mainframe
“centralized intelligence”
Data-driven
Minicomputer, mostly
“centralized intelligence”
User-driven
Networked, microcomputers
“decentralized intelligence”
Business-driven
Client/Server, global
“distributed intelligence”
Era V 2000+
Value creation
Create collaborative partnerships
Adding value
Customer, supplier, ecosystem
Knowledgedriven
Internet, global
“ubiquitous intelligence”
Basis of Value
Scarcity
Underlying
Economics of information
Economics bundled with economics of
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Scarcity
Economic of information bundled with economics of things
Scarcity
Economic of
Information bundled with economics of things
Plentitude
Economics of information separated from economic of things
Plentitude
Economics of information separated from economics of things
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New Competitors
New Rules of
Competition
Industry structure
Changes
New regulatory
Environment
The
Business
 Dr. Chen, Information, Organization and Control
Increasing Customer
Expectation
New Political
Agendas
New
Technology
New Employees and New Value
IT INFRASTRUCTURE
IT Architecture:
- Hardware
- Software
- Telecom Networks
Database
Information System
Specialists:
CIO
Managers
System Analysts
System Developers
Programmers
Network Specialists
Database Administrators
Clerical
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IT Planning: The Relationship Between Business, IS, and IT Strategies
IT
Impact and potential
Business Strategy
• Business Decisions
• Objectives and Direction
• Change
Supports business
Direction for business
Where is the business going and why
IS Strategy
• Business Based
• Demand Orientated
• Application Focused
Infrastructure
And services
Needs and priorities
What is required
IT Strategy
• Activity Based
• Supply Orientated
• Technology Focused
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
How it can be delivered
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• 1. Anticipating new technologies.
– IT must keep an eye on emerging technologies.
– Work closely with management on decisions.
– Weigh risks and benefits of new technologies.
• 2. Participating in setting strategic direction.
– IS can act as consultants to management.
– Educate managers about current technologies/trends.
• 3. Innovating current processes.
– Review business processes to innovate.
– Survey best practices.
• 4. Developing and maintaining systems.
– Build or buy software.
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
(continued)
• 5. Supplier management.
– Carefully manage outsourced IT.
• 6. Architecture and standards.
– Be aware of incompatibilities.
– Inconsistent data undermines integrity.
• 7. Enterprise Security
– Important to all general managers.
– Much more than a technical problem.
• 8. Business continuity planning
– Disaster recovery.
– “What if” scenarios.
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(with total of 13 activities)
(continued)
• 9. Managing Data, Information, and
Knowledge
• 10. Managing Internet and Network Services
• 11. Managing Human Resource
• 12. Operating Data Center
• 13. Providing General Support
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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such as:
– Selling
– Manufacturing
– Accounting.
– General managers must not delegate critical technology decisions.
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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• Weill and his colleagues define IT governance as
“specifying the decision rights and accountability framework to encourage desirable behavior in using
IT.”
• The focus is not what, but who .
• Good IT governance provides a structure to make good decisions.
– The assignment of decision-making authority and responsibility (e.g., IT principle, architecture, infrastructure, business application needs and investment and priority)
– The decision-making mechanisms (e.g., policy and steering committee, IT governance council, etc.)
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Categories of IT Governance (Decisions)
• Assume that you are CIO in your organization. When it comes specifically to IT governance, you and your colleagues propose six generally applicable categories of IT decisions.
Which ONE of the following is NOT one of your categories?
• 1) IT cost and evaluation
• 2) IT principles
• 3) IT architecture
• 4) IT infrastructure strategies
• 5) Business application needs
• 6) IT investment and prioritization
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Category
IT Principles
Description
High-level statements about how IT is used in the business
Examples of Affected
IS Activities
Participating in Setting
Strategic Direction
IT Architecture
An integrated set of technical choices to Establishing architecture guide the organization in satisfying business needs. The architecture is a set of policies and rules for the use of IT and standards
IT Infrastructure
Strategies and plots a migration path to the way business will be done
Strategies for the base foundation of budgeted-for IT capability (both technical network services; providing and human) shared throughout the firm
Managing internet and general support; Managing as reliable services, and centrally coordinated data; Managing human resources
Business Application Specification of the business need for
Needs purchased or internally developed IT applications
IT Investment &
Prioritization
Decision about how much and where to invest in IT including project approvals and justification techniques
Developing and maintaining information systems
Anticipating new technologies
Figure 8.6 - Five major categories of IT decisions
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• Large global MIS organizations face many of the same organizational issues as any other global department.
• For IS, a number of issues arise that put the business at risk beyond the typical global considerations.
• Table 8.9 summarizes how a global IT perspective affects six information management issues.
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Figure 8.9 Global Considerations for the MIS Organization
Issue
Political
Stability
Global IT Perspective
How risky is investment in a country with an unstable government ?
Example
India, a country that faces conflict with Pakistan
Transparency Domestically, an IT network can be end-to-end with little effort compared to global networks
Business
Continuity
Planning
Cultural
Differences
When crossing borders, it is important to make sure that contingency plans are in place
IT systems must not offend or insult those of a different culture
Sourcing Some technologies cannot be exported or imported into specific countries
Data Flow Data, especially private or across Borders personal data, is not allowed to cross some borders.
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
SAP-R3 can be used to support production processes but only if installed
Concern when crossing boarders is will data center be available when/if needed
Using images or artifacts may be insulting to another culture
Exporting it to some countries, especially those who are not political allies is not possible
For example: Brazil
• Management
– Planning
• Leadership
– Establishing direction
– Budgeting
– Organizing
– Staffing
– Controlling
– Aligning people
– Motivating
– Inspiring
– Empowering
– Problem-solving – Problem-preventing
“Soft” Interpersonal Skills
• Effective communication
• Deep listening
• Facilitating
• Negotiating
• Working with conflict
• Relationship building
• Understanding how to work effectively in teams
• Knowing when to say NO!
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• The power of IS department now and the future will come from leadership , influence and capability - and less from control .
• The measure of success of the IS will no longer be numbers of people but contributions to the business quality, speed, products/services , and innovation.
• The roadblock to competitive advantage generally is not technology, but implementation - with people.
• Successful implementation requires working closely with line people. Thus IS departments need to establish better relationships with outside organizations, senior management, and users.
• Managers must work with IT leaders to develop a lean, competitive enterprise, where IT acts as a strategic enabler.
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